After more than two years of declining home prices and rising foreclosures, Congress has finally come up with a proposal that could keep hundreds of thousands of borrowers from losing their homes.

True, the bill is currently stymied in the Senate and faces a veto threat from President Bush.

But it could be the closest thing we'll see to a significant remedy coming out of Capitol Hill. Judging from the wave of foreclosures that is about to hit us, we'll need it.

Here's the situation. Nationwide, more than 1.2 million homes are in foreclosure – and we're not even halfway through the foreclosure wave. By the time the smoke clears in 2010, as many as 3 million more homes will be foreclosed upon nationwide, some analysts predict.

Last month alone, there were 5,297 defaults and foreclosures in San Diego County, twice as many as the year before, according to RealtyTrac, a firm in Irvine that tracks the real estate market.

Hardest hit was the city of San Diego, with 1,880 defaults or foreclosures, followed by 730 in Oceanside, 431 in Escondido and 227 in El Cajon, according to Default Research Inc. in Pennsylvania. Not all of the defaults will end up as foreclosures. But then again, those numbers don't count short sales – people who sell their home at a loss to avoid foreclosure. If you factor the short sales in, the number of troubled properties rises dramatically.

To clean up this mess, Democrats on Capitol Hill have been pushing for a bill to help the Federal Housing Administration extend up to $300 billion in low-interest loans to borrowers who have been unable to keep up with the adjustable rates on their current mortgages.

The proposal – which passed in the House 10 days ago but and is now stymied in the Senate – echoes a program that President Franklin Roosevelt introduced in 1933 to aid homeowners in the Great Depression. It was one of the few Depression-era programs to turn a profit, because the vast majority of borrowers repaid their government-backed mortgages in full.

The Congressional Budget Office, which apparently believes today's borrowers are not as trustworthy as they were in the 1930s, estimates that the program could cost $1.7 billion. But considering the downside if a fix doesn't come soon – massive foreclosures, deteriorating neighborhoods, growing numbers of homeless people, depressed property values, a deeper recession, etc. – that seems like a small price to pay, right?

Wrong. Or at least not to everybody.

“What we're talking about here is a $300 billion bailout for those who were scamming the market,” said House Minority Leader John Boehner, R-Ohio. “Democrats are forcing responsible homeowners and taxpayers to pick up a $300 billion tab to bail out scam artists, speculators and reckless borrowers.”

Boehner and the vast majority of House Republicans voted against the bill, including our own Reps. Duncan Hunter, Brian Bilbray and Darrell Issa. Democratic Reps. Susan Davis and Bob Filner voted for the proposal.

Although the bill passed in the House, it has been stuck in the Senate, which has a smaller Democratic majority. Even if it makes it out of the Senate, President Bush is threatening to use his veto pen if the final version of the bill smacks too much of being a taxpayer-funded bailout.

All of this squabbling seems more like political posturing than anything else.

For one thing, Boehner's wrong. The bill is specifically designed to weed out speculators and scam artists. If history is any guide, taxpayers may make a slight profit on the proposal. And even if they don't, the so-called bailout would be less than $2 billion, not the $300 billion that he and other opponents are railing about.

For another thing, there seems to be a great deal of hypocrisy regarding what constitutes a bailout. Throughout the past year, we have seen the administration and the Federal Reserve work to bail out banking institutions such as the now-defunct Bear Stearns.

We have also seen Boehner and other Republicans in Congress refuse to back a previous weak package for homeowners unless it included multibillion-dollar tax breaks for corporations that lost money during the mortgage debacle – regardless of the fact that some of those corporations helped cause the problems by extending risky loans to unworthy borrowers.

The fact is that the vast majority of homeowners who are in trouble now were not “scamming the market.” Speculators constituted a relatively small minority of the buyers who got burned over the past few years – fewer than one in five defaulting borrowers, according to a Federal Reserve study.

“By far the largest category is the people who had mortgages they shouldn't have gotten in the first place, including some who were duped into taking out the loans,” said Jerry Kalman, a real estate agent at the Bonsall office of RE/MAX United. “I've heard stories of how a lot of chicanery went on. It's probably 50-50 as to how many people got their loans through greed compared to faulty guidance or questionable practices.”

Still, there is a valid question here: Should we help out homeowners who made bad choices, whether through greed or naiveté?

In former times, you could make the argument that we should show some compassion to our fellow citizens. But since that argument doesn't seem to go far these days, let's just say that by helping them, we may end up helping ourselves, because the ramifications of the mortgage crisis seem increasingly dire for our economic health.

Federal Reserve Chairman Ben Bernanke – who originally took a laissez-faire approach to the mortgage crisis – is sounding more and more like the poet John Donne. “No homeowner is an island,” Bernanke warns these days. “The bell that tolls in the real estate market tolls for thee.”

With an increasingly urgent tone, Bernanke has been warning lately that if the foreclosure problem isn't fixed soon, the effect on the economy could be much more severe than we're experiencing right now.

“High rates of delinquency and foreclosure can have substantial spillover effects on the housing market, the financial markets and the broader economy,” he said last week. “Therefore, doing what we can to avoid preventable foreclosures is not just in the interest of the lenders and borrowers. It's in everybody's interest.”